I am about to employ people for the first time. What do I need to do?
You should contact the new employers helpline at the Inland Revenue on 0845 607 0143, and tell them. They will ask you a set of questions about your business structure, so have things such as the Company Registered Number to hand when you call. They will issue you an employer's starter pack through the post, and arrange for reference numbers to be issued and a payslips booklet (P30) so that you can pay over the tax and NI you deduct.
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What information must I have from a new employee before I pay them?
You should have their full name, date of birth, address, and their National Insurance Number. Additionally you should ‘identify' your employees by viewing their passport or driving licence, and by seeing a utility bill or similar document. In the case of foreign nationals you should satisfy yourself they have permission to be employed in the United Kingdom . If you have any doubts as to their true identity or their right to work in the UK you should contact the Department of Work & Pensions for advice.
The new employee should also provide you with a P45 or P46 or P38(S)
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What are P45, P46, P38(S)?
P45
New employees ought to bring you parts 2 and 3 of a P45 issued either by their last employer or the Job Centre. The P45 has information to tell us which tax code to apply. You should safely file part 2 for future reference, and having completed the lower portion of part 3, send it to the Payline office. However, workers are known to lose their P45, or the previous employer might be late in issuing it.
P46
Don't worry if a P45 is not available; in this case you must complete a P46. A blank P46 is available from the ‘downloads' area of this website. Ask your new employee to complete the declaration on a P46, you complete the remainder, and send the P46 to the Payline office.
P38(S) - If your new employee is in full time education
Instead of a P46, students working during their vacation periods only, and only for you, should complete a Student Declaration called a P38(S). A new P38(S) must be completed and kept safely by you for future reference for each tax year the student works for you. This form is not available on-line, so contact Payline if you need one.
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My new employee has not got a National Insurance number, what should I do?
If they have never had one, they must make an appointment to visit their local Department of Work and Pensions (DWP) for an interview. See more details at:
http://www.dwp.gov.uk
If they have simply lost the record of their NI number, the Inland Revenue will execute a search for it on receipt of a completed form CA6855. This form is available in the 'downloads' area of this website.
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Is a National Insurance number important and if so, why?
It is very important. Only one number is allocated to each citizen and they keep that same number all their life. It is unique, and ensures the Inland Revenue correctly records NI contributions or credits to the correct person's NI account. These contributions and credits are vital when claiming benefit, whether it is for a short while, like Incapacity Benefit or long term, such as a Retirement Pension. A National Insurance (NI) Number is personal to the individual. It is the account number allocated to use in all dealings with the Inland Revenue and the Department for Work and Pensions.
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Why is it important to record and employee's date of birth?
So we know whether they are inside the age range for paying National Insurance Contributions.
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How does BACS work? Does the money go through Payline's bank account?
No money passes through our account. Payline is an accredited and certified BACS bureau, authorised to send instructions to BACS on your behalf. Once we have run your payroll and received your signed authority we submit instructions to debit the your bank account and credit your employees' bank accounts on the prescribed day. Click here for a podcast on 'How BACS Works' recorded by our MD, Mike Steer.
The BACS cycle comprises three stages: -
Transmission – Day 1 of the cycle
Payline submits the instructions electronically to BACS
Processing – Day 2
BACS checks the amounts against your credit limit and notifies the banks to credit the employees' accounts and simultaneously debit the employer's account on day 3
Payment – Day 3
At around 09.30 the funds are available in the employees' accounts
BACS only operates on banking days, so in the above cycle, weekends and bank holidays would be skipped over.
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Why is using BACS better than simply paying my staff by cheque?
There are a number of reasons. First and foremost it's less expensive, as most banks charge considerably more for processing paper transactions than they do electronic ones. Your employees get the satisfaction of receiving their pay in their accounts without having to visit the bank to pay in. Also it makes reconciliation easier for you, as regardless of the number of workers on a payroll run, there will be only ONE entry on your bank statement. Furthermore it's a lot quicker for you; all you have to do is approve the figures by signing our authority, and fax it back to us.
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I've heard that I will get an £825 payment for “Electronic Filing”. What's that all about?
The Inland Revenue wants all employers to submit their end of year PAYE return electronically. Payments totalling £825 will be made over a 5-year period to employers who file this way, or have an agent like Payline to submit the file for them.
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How quickly can Payline process my firm's payroll?
Very quickly. We usually turn payrolls around and fax or email you a summary report and BACS authority report within a couple of hours of receiving your instructions. Our terms of business require that you give us the instructions for your payroll at least 24 hours before the BACS transmission day, so if any queries arise they can be answered without jeopardising the transmission deadline.
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What happens if we want to change something after the payroll has been run?
All you have to do is tell us what changes need to be made. We will recalculate the payslip(s) concerned and send you a fresh batch of reports.
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As an employer, do I still have responsibilities to the Inland Revenue even though I pay a bureau to manage my payroll?
It is your responsibility to ensure you remain compliant with payroll regulations, but life is made much easier for you when you outsource your payroll to Payline. For example, all notifications of changes to employees' tax codes, tax credits, student loans etc are sent by the Inland Revenue direct to us to be implemented. And as part of our service we calculate things like the Threshold Recovery of SSP for you, ensuring the correct amount of NICs and PAYE get paid to the Inland Revenue each month. We even provide a free helpline. In effect, we guide you in all the important areas of compliance.
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